Simon Still Carrying Debt From Last Campaign

Bill Simon Jr., preparing to run in the recall to replace Gov. Gray Davis, will enter the campaign with a $9.5-million campaign debt, campaign finance reports filed Thursday show.

Simon’s debt is left over from the gubernatorial campaign he lost to Davis last year. Simon loaned and gave himself nearly $10 million out of the $30 million he spent on last year’s campaign. Based on his midyear filing, Simon has repaid none of the loans.

Sal Russo, who was Simon’s chief political strategist in the 2002 race, dismissed the size of Simon’s campaign debt and predicted that the businessman will be able to raise a sufficient amount of money. “He is going to be able to wage an effective campaign,” Russo said.

Davis reported raising $295,000 in the first six months of the year. The governor had said at the start of his second term that he would stop most of his fund-raising efforts, and the amount that he raised between January and June 30 was in sharp contrast to his first term, when he raised $70 million, pulling in an average of $1.5 million a month.

So far, Davis has been depleting the remnants of the $70 million he raised in the first term, according to his report. He spent $1.2 million during the reporting period, leaving him with $881,000 in the bank as of June 30.

A committee established by Davis’ supporters reported raising $1.5 million, and having $39,000 in the bank.

“The bottom line is that the governor is going to have the resources he needs to run an effective campaign against the recall,” said Peter Ragone, a spokesman for the anti-recall campaign. Campaign consultants say the ante for candidates hoping to mount serious races in the Oct. 7 recall election could be $10 million, and perhaps as much as $20 million.

On Thursday, Davis said he would not exercise his right under the state Constitution to seek taxpayer reimbursement for campaign expenses if he defeats the recall effort.

The state Constitution provides that “a state officer who is not recalled shall be reimbursed by the state for the officer’s recall election expenses legally and personally incurred.” Whether that provision covers the costs of a campaign for which a politician raises donations is unclear, legal experts said.

In a statement, Davis said he had “decided not to seek any reimbursements because I know that taxpayer money would be better spent on our kids’ schools, health care and public safety.”

As Davis steps up his campaign to remain in office, a key pillar of his defense strategy is to emphasize the costs to taxpayers of holding a special recall election in October. Secretary of State Kevin Shelley now estimates that cost at between $53 million and $66 million.

That stance did not leave Davis much choice about rejecting taxpayer reimbursement, Republican analysts said.

“There’s no way in the world he could continue to argue against the costs of the recall when he was potentially going to stick the voters with an even bigger tab,” said Dan Schnur, a Republican political consultant.

In his statement, Davis also called on the “millionaire Republicans” who put their names on the recall ballot to reimburse taxpayers for the state’s expense in holding the election if the recall effort fails.

One of the wealthy Republicans who plans to run against Davis, Rep. Darrell Issa (R-Vista), reported Thursday that he had given his campaign for governor $500,000, loaned himself another $100,000, and raised $57,000 from outside donors in the first half of 2003.

Additionally, Issa reported loaning $1.53 million to Rescue California, the committee established to pay for the effort to get the recall on the ballot. Altogether, Rescue California raised $2.2 million. Of the money not contributed by Issa, $354,000 came in donations of less than $100.

The biggest expense for the pro-recall committee was on signature gathering. Bader and Associates, the company based in Newport Beach that gathered more than a million signatures of registered voters to place the recall on the ballot, received $929,000. Tom Bader, the firm’s owner, said in a phone interview that the effort paid $1.40 per signature.

In addition to placing paid signature gatherers on the streets, the recall campaign sent out 2 million letters, paying $670,000 to Monaco Group of Placentia, a direct-mail firm.

A second recall committee, called Recall Gray Davis, reported raising nearly $600,000 so far this year, including $430,000 since April 1, with nearly all that money coming in checks of less than $1,000.

Among other Republicans who have talked of running against Davis, Sen. Tom McClintock (R-Thousand Oaks) reported that he had raised $35,000.

Simon’s report noted that there were disputes over several bills that Russo had submitted to Simon. In an interview, Russo said the disputes have been settled and that there is no acrimony between him and the candidate.